Inflation (Economics)

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      Harris and Trump Offer a Clear Contrast on the Economy

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      Both candidates embrace expansions of government power to steer economic outcomes — but in vastly different areas.Vice President Kamala Harris and former President Donald J. Trump flew to North Carolina this week to deliver what were billed as major speeches on the economy. Neither laid out a comprehensive policy plan — not Ms. Harris in her half-hour focus on housing, groceries and prescription drugs, nor Mr. Trump in 80 minutes of sprinkling various proposals among musings about dangerous immigrants.But in their own ways, both candidates sent voters clear and important messages about their economic visions. Each embraced a vision of a powerful federal government, using its muscle to intervene in markets in pursuit of a stronger and more prosperous economy.They just disagreed, almost entirely, on when and how that power should be used.In Raleigh on Friday, Ms. Harris began to put her own stamp on the brand of progressive economics that has come to dominate Democratic politics over the last decade. That economic thinking embraces the idea that the federal government must act aggressively to foster competition and correct distortions in private markets.The approach seeks large tax increases on corporations and high earners, to fund assistance for low-income and middle-class workers who are struggling to build wealth for themselves and their children. At the same time, it provides big tax breaks to companies engaged in what Ms. Harris and other progressives see as delivering great economic benefit — like manufacturing technologies needed to fight global warming, or building affordable housing.That philosophy animated the policy agenda that Ms. Harris unveiled on Friday. She pledged to send up to $25,000 in down-payment assistance to every first-time home buyer over four years, while directing $40 billion to construction companies that build starter homes. She said she would permanently reinstate an expanded child tax credit that President Biden temporarily established with his 2021 stimulus law, while offering even more assistance to parents of newborns.She called for a federal ban on corporate price gouging on groceries and for new federal enforcement tools to punish companies that unfairly push up food prices. “My plan will include new penalties for opportunistic companies that exploit crises and break the rules,” she said, adding: “We will help the food industry become more competitive, because I believe competition is the lifeblood of our economy.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      The Big Number: 2.9%

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      The rate of inflation in July on a yearly basis.Inflation slowed in July, the Consumer Price Index showed, increasing 2.9 percent from a year earlier. That was a drop from 3 percent in June, and it marked the first time that inflation had fallen below 3 percent since 2021.Inflation is still higher than the Federal Reserve’s target of 2 percent, but it has fallen well below the high of 9.1 percent reached in June 2022. The report on Wednesday was another data point to suggest that the Fed will cut interest rates when it meets next month.“It doesn’t mean our work is done, but it does mean we’re moving in the right direction, and with a bit of momentum,” Jared Bernstein, chair of the White House Council of Economic Advisers, said in an email after the release of the report.The Fed started raising interest rates in March 2022 to slow demand and bring price pressures under control after a run-up during the Covid-19 pandemic. Since July 2023, the Fed has held rates steady at about 5.3 percent, the highest level in more than two decades.But evidence like Wednesday’s report makes it all the more likely that the central bank will begin cutting rates, especially after the unemployment rate last month ticked up to 4.3 percent. Historically, increases in joblessness like the one in July have been an indicator of a recession.Still, consumer spending has remained robust while the economy has continued to grow.Can the growth continue? That is the unanswered question at the moment.“The government is taking action to ensure that these products do not turn the dream of homeownership into a nightmare.”Rohit Chopra, the director of the Consumer Financial Protection Bureau, on the agency’s intention to crack down on seller-financed home sales, a predatory practice.“You can’t compare a machine-made cookie with a handmade cookie. It’s like comparing a Rolls-Royce with a Volkswagen.”Wally Amos, the creator of the cookie brand Famous Amos, said in an interview with MSNBC in 2007. He died Tuesday.“We took what people thought were Tubi’s perceived weaknesses — older content, no stars, lower-budget movies — and we made it our strength.”Nicole Parlapiano, Tubi’s marketing chief, on how Tubi has become one of the most popular streaming services.

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      Inflation Progress Cheers Biden and Democrats

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      After more than two years of being politically battered over soaring prices, Wednesday’s inflation report left many Democrats feeling victorious.Consumer prices rose 2.9 percent in the year through July, falling below 3 percent for the first time since 2021. The report keeps the Federal Reserve on track to cut interest rates next month, a move that could lift economic sentiment in the United States ahead of the November election.“We’ve won the battle against inflation,” Bharat Ramamurti, former deputy director of the National Economic Council, wrote on X. “It’s time for the Fed to begin cutting rates.”Congressional Democrats were also using the report to push the Fed to cut aggressively.“Inflation is down,” Senator Martin Heinrich of New Mexico, the chairman of the Joint Economic Committee, said in a news release. “The price of gas or a new car have fallen over the last year. And many families can now breathe a bit easier. Now, we need to make sure that this relief is reaching all Americans.”Republicans have been hammering Democrats over inflation and are unlikely to let them off the hook. They continue to note that prices are up nearly 20 percent since President Biden took office and note that the labor market is showing signs of slowing.“Despite a small improvement in the rate of price increases, the damage from the Biden-Harris administration’s philosophy of ‘tax it, regulate it, and spend it’ is done and continues to plague the economy,” said Representative Jodey Arrington of Texas, the chairman of the House Budget Committee. “It’s hard to fathom how hardworking American families can survive another four years of the Biden-Harris failed economic agenda.”Vice President Kamala Harris, the Democratic presidential nominee, has pledged to crack down on corporate price gouging and is expected to lay out additional plans for lowering costs in a speech this week.Former President Donald J. Trump, her Republican opponent, will hold a rally in Pennsylvania this weekend with a focus on inflation, according to his campaign. He has claimed that the Biden administration’s spending policies have fueled record levels of inflation.“Under Kamala Harris, everything costs 20 percent more than it did under President Trump,” said Karoline Leavitt, the Trump campaign’s national press secretary. “America cannot afford another four years of Kamala’s failed economic policies.”While Mr. Biden cheered the inflation figures, he cautioned that the cost of living remained too expensive. He said large corporations had been sitting on record profits and failing to do enough to help.“We have more work to do to lower costs for hardworking Americans, but we are making real progress,” Mr. Biden said, while noting that wages have outpaced price increases for 17 months running. “Prices are still too high.” More

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      How Food Prices Have Changed During the Biden Administration

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      Grocery prices are no longer rising as rapidly, but food inflation remains a top issue for voters, polls show.A central issue has plagued the Biden administration for most of its term: the steep rise in grocery prices.Polls have consistently found that inflation remains a top concern for voters, who have seen their budgets squeezed. A YouGov poll published last month found that 64 percent of Americans said inflation was a “very serious problem.” And when it comes to inflation, several surveys suggested that Americans were most concerned about grocery prices.Despite the gloom about grocery costs, food price increases have generally been cooling for months. On Wednesday, new data on inflation for July will show if the trend has continued.Economists in a Bloomberg survey think that inflation overall probably climbed by 3 percent from a year earlier, in line with a 3 percent rise in June. That sort of reading would probably keep officials at the Federal Reserve on track to cut interest rates in September. Investors, who were recently rattled by signs of an economic slowdown, have looked to rate cuts as a support for markets.Some voters have blamed President Biden for rising prices, pointing out that food costs have soared over the past four years. Former President Donald J. Trump, when accepting the Republican nomination last month, highlighted grocery costs and said that he would “make America affordable again.”In the year through June, grocery prices rose 1.1 percent, a significant slowdown from a peak of 13.5 percent in August 2022. Many consumers might not be feeling relief, though, because food prices overall have not fallen but have continued to increase, albeit at a slower rate. Compared with four years ago, grocery prices are up about 20 percent.

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      Annual change in grocery prices for U.S. consumers
      Year-over-year change in average for “food at home” index, not seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Fed Rate Cuts Are Expected Soon, as Inflation Cools. But Will They Be Early Enough to Avoid a Recession?

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      The Federal Reserve was about to cut interest rates, turning the corner after a long fight with inflation. But now, its soft landing is in question.The Federal Reserve’s fight against inflation was going almost unbelievably well. Price increases were coming down. Growth was holding up. Consumers continued to spend. The labor market was chugging along.Policymakers appeared poised to lower interest rates — just a little — at their meeting on Sept. 18. Officials did not need to keep hitting the brakes on growth so much, as the economy settled into a comfortable balance. It seemed like central bankers were about to pull off a rare economic soft landing, cooling inflation without tanking the economy.But just as that sunny outcome came into view, clouds gathered on the horizon.The unemployment rate has moved up meaningfully over the past year, and a weak employment report released last week has stoked concern that the job market may be on the brink of a serious cool-down. That’s concerning, because a weakening labor market is usually the first sign that the economy is careening toward a recession.The Fed could still get the soft landing it has been hoping for — weekly jobless claims fell more than expected in fresh data released on Thursday, a minor but positive development. Given the possibility that everything will turn out fine, central bank officials are not yet ready to panic. During an event on Monday, Mary C. Daly, the president of the Federal Reserve Bank of San Francisco, suggested that officials were closely watching the job market to try to figure out whether it was cooling too much or simply returning to normal after a few roller-coaster years.“We’re at the point of — is the labor market slowing a lot, or slowing a little?” Ms. Daly said, as she pointed to one-off factors that could have muddled the latest report, like Hurricane Beryl and a recent inflow of new immigrant workers that left more people searching for jobs.“It’s clear inflation is coming down closer to our target, it’s clear that the labor market is slowing, and it’s to a point where we have to balance those goals,” she said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Productivity Surges 2.3%, Beating Forecasts

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      The NewsProductivity grew at a 2.3 percent annual rate in the second quarter, the U.S. Bureau of Labor Statistics reported on Thursday, surpassing economists’ expectations. The pickup was a major improvement upon the sluggish 0.4 percent rate in the first quarter. And on a yearly basis, productivity increased 2.7 percent. That far exceeds prepandemic averages.An assembly line at a car plant in Michigan in April.Bill Pugliano/Getty ImagesWhy It Matters: A key to prosperity.A highly productive economy generally means businesses and workers are operating efficiently, making more money in fewer hours. In the second quarter, production was up 3.3 percent, while hours worked rose 1 percent.On a less technical level, productivity is best explained by the old axiom of “doing more with less” or the folksy virtue of “getting the biggest bang for your buck.”Economists tend to sigh with relief when they see productivity gains because it offers a potential “win-win” for workers, customers and business owners: If businesses can make more money in fewer work hours, then — according to basic economic logic — they can presumably make more dollars per hour, while also reinvesting and giving workers raises, without sacrificing profits.Being able to make more with less (or with the same amount of labor and machinery) also means businesses may not feel as much pressure to set higher prices to push profits. That, too, is welcome news after a yearslong bout of inflation.Facts to Keep in Mind: A volatile indicator.Productivity, at a basic level, is calculated as a simple ratio: the total amount of output an economy produces per hour worked by its labor force. But the output side of the equation is adjusted for inflation on a quarterly basis. That can cause volatility, in both directions.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Auto Sales Grew Slightly in Second Quarter

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      High interest rates, economic uncertainty and a cyberattack appear to have dampened sales in the three months between April and June.Most automakers on Tuesday, with the exception of Tesla, reported modest sales growth in the three months between April and June as high interest rates, persistently high vehicles prices, and uncertainty about the economy and the coming presidential election weighed on consumers.Sales in late June were also slowed by disruptions at car dealers stemming from a cyberattack on a company that supplies software and data services to dealerships.Cox Automotive, a market research firm, estimated that 4.1 million new cars and trucks were sold in the second quarter, up a little more from the same period in 2023. In the first six months of 2024, 7.9 million new vehicles were sold, an increase of 3 percent from the first half of last year, Cox said.Slow growth is likely to continue through the rest of the year, with consumers delaying big-ticket purchases until after the election, said Jonathan Smoke, Cox’s chief economist. “The market is roiled by uncertainty,” he said. “We probably can’t quite keep the pace of sales of the first half, but we aren’t expecting a collapse in sales, either.”Cox has forecast 15.9 million new cars and trucks will be sold this year. That would be an increase from the 15.5 million that were sold last year, but still well below the 17 million vehicles sold annually before the pandemic.General Motors said on Tuesday that it sold nearly 700,000 cars and light trucks in the United States in the second quarter, an increase of less than 1 percent from the same period last year. The company said it was its highest quarterly total since the fourth quarter of 2020.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Biden Addresses Inflation in New Ad

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      Inflation is one of President Biden’s biggest weaknesses with voters heading into November, and former President Donald J. Trump has hammered him on the issue relentlessly.But Mr. Biden is trying to fight back: His campaign released a new advertisement on Thursday featuring him talking about his working-class roots and expressing sympathy for Americans struggling with high prices.The ad, produced in English and Spanish, is part of a seven-figure June media purchase targeted to Hispanic voters. It will run on television, radio and digital platforms across the battleground states, according to the Biden campaign, and is debuting on a day when Mr. Trump is set to speak in Washington to the Business Roundtable, a powerful lobbying group.Mr. Biden has built a sizable fund-raising advantage over Mr. Trump and has used his campaign war chest to dominate the airwaves. But the former president still leads in many polls, and he has made significant progress with Hispanic voters since his defeat in 2020. He is also making up ground in fund-raising.What the ad saysThe 30-second ad begins with a voice-over from Mr. Biden recounting his family leaving their hometown so his father could find work, paired with a black-and-white image of people carrying suitcases.“I know what it’s like to struggle,” the president says. “I know many American families are fighting every day to get by.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More